As the in-destination sector looks toward and plans for recovery, two major trends are emerging – a preference for local and domestic trips, and a shift toward digital booking, which will likely persist long after this pandemic no longer constricts human movement.

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Acceleration of Digital Transformation

While other segments of travel, like air travel and hotels, have been sold primarily via online channels, fragmentation and product diversity have made it difficult to aggregate tours, activities and attractions for sale via online travel agencies. Plus, many operators saw no need to invest in digitizing their ticketing. The segment has made a big shift toward online channels over the last few years, but there is still a lot of room to further embrace digital sales. Operators conducted $44 billion in sales via their own sites and online travel agencies in 2019, 17% of the total market, according to Arival. But travelers have grown accustomed to booking other products online, and demand for digital shopping is apparent in the destination category. Desktop and laptop computers are the gateway to planning travel activities, preferred almost two-to-one over guidebooks and family and friends.

Under the pandemic’s pressure, offline bookings have suddenly become significantly less practical. Many attractions now are only taking bookings online. Travelers also see new benefits to booking ahead online: It limits the time spent waiting in lines and engaging face-to-face with operators.

When travel began to return from the Great Recession of 2009, global online hotel bookings surged more than twice as fast as the hotel industry overall. OTA growth led the recovery as travelers turned to aggregators in search of deals and comparison shopping. Similar trends are expected as travel climbs out of the Covid-19 lockdown, especially in the largely offline activities sector. 

Distribution & the State of OTAs 

OTAs were responsible for less than 5% of the total global market for tours, activities and attractions in 2019, according to Arival’s Experience Revolution: Size & Structure of the Global Operator Landscape. Despite the relatively small share of the market they represent, they have been the fastest growing channel. 

Furthermore, in many key touristic markets and for many operators who are focused on leisure tourism, OTAs play a much bigger role. For many operators, OTAs may comprise a significant percentage of total sales. TrekkSoft’s O’Sullivan noted that for their network of operators, OTA sales reached its peak, making up one-third of all bookings in 2019. The key question is what will the role of OTAs be going forward? OTAs have been upended by the pandemic as much as operators. 

Post-Covid, OTAs are expected to play a bigger role in sales. OTAs have been the fastest growing channel, expanding at more than three times the rate of the market overall in 2019. They are likely to be more important than ever in the recovery as travelers leave less to the last minute and do more online planning and booking.

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Virtual experiences may be a business 

In the face of a global pandemic that brought travel to a near standstill, operators and OTAs quickly rolled out virtual tours and experiences to connect with customers and raise much needed cash.

Airbnb is all in with their Online Experiences initiative. As head of Airbnb Experiences for Asia Pacific, Parin Mehta explained, “We wouldn’t undertake it if this couldn’t be a real business.” Airbnb virtual roster includes some authentic, very special hosts, including Broadway performers, star athletes, and other celebrities that would be out of reach for small tour and activity operators or other platforms without the scale and resources such as Airbnb has.

Over the long term, virtual experiences could become a standard part of an operator’s marketing arsenal, giving travelers a chance to connect with a guide and get a feel for the experience before making the booking. Designing these experiences as lead-generation and marketing for in-person products is likely to pay off well past the pandemic, while also helping to build brand for the business.

Conclusion

After the pandemic, digital transformation and online distribution channels can be the driving trends in recovery. Investing in digitalization and product development on online distribution channels is an opportunity for investors and businesses to optimize revenue. At the same time, online channels also help to reach, build trust in customers and promote business brands better.

View more details at: Trekksoft Travel Trend Report

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